Labstand Compiled Set of Case Doctrines

LABOR STANDARDS under Atty.
Joyrich Golangco
Compiled Set of Case Doctrines
Prepared by: 2-I San Beda Law 2015-2016
COMPILED SET OF CASE DOCTRINES

1. PEOPLE v CHUA
From the provisions of Article 139(b) of the Labor Code as amended, it is clear that any recruitment activities undertaken by
non-licensee or non-holder of contracts, or as in the present case, an agency with an expired license, shall be deemed
illegal and punishable under Article 39 of the Labor Code. And illegal recruitment is deemed committed in large scale if
committed against three or more persons individually or as a group.
Thus for illegal recruitment in large scale to prosper, the prosecution has to prove three essential elements, to wit: 1.
Accused undertook a recruitment activity under Article 13(b) or any prohibited practice under Article 34 of the Labor Code;
2. The accused did not have the license or the authority to lawfully engage in the recruitment and placement of workers; and
3. The accused committed such illegal activity against three or more persons individually or as a group.
Intent is immaterial in illegal recruitment in large scale. Violation of which is malum prohibitum.
2. PEOPLE v GALLO
To commit syndicated illegal recruitment, three elements must be established: 1. The offender undertakes either in any
activity within the meaning of “recruitment and placement” defined under Article 13(b), or any prohibited practices
enumerated under Article 24 of the Labor Code; 2. He has no valid license or authority required by law to enable one to
lawfully engage in recruitment and placement of workers; and 3. The illegal recruitment is committed by a group of 3 or
more persons conspiring and confederating with one another.
Testimonial evidence presented by the prosecution clearly shows that, in consideration of a promise of foreign employment,
accused-appellant received the amount of Php45,000 from Dela Caza. When accused-appellant made misrepresentations
concerning the agency’s purported power and authority to recruit for overseas employment, and in the process, collected
money in the guise of placement fees, the former clearly committed acts constitutive of illegal recruitment.
Actual or direct proof of previous agreement to commit a crime is not essential to establish conspiracy as it may be deduced
from the mode and manner in which the offense was perpetrated.
Positive identification where categorical and consistent and not attended by any showing of ill motive on the part of the
eyewitnesses on the matter prevails over alibi and denial.
3. YAP v THENAMARIS SHIP’S MANAGEMENT
We have already declared in Serrano that the clause “or for three months for every year of the unexpired term,
whichever is less” provided in the 5th paragraph of Section 10 of RA 8042 is UNCONSTITUTIONAL for being violative of
the rights of the OFWs to equal protection of the laws. In the exhaustive decision of the intricacies and ramifications of the
said clause, this Court, in Serrano, pertinently held: This Court concludes that the subject clause contains a suspect
classification in that, in the computation of the monetary benefits of fixed-term employees who are illegally
discharged, it imposes a 3-month cap on the claim of the OFWs with an unexpired portion of 1 year or more in their
contracts, but none on the claims of other OFWs or local workers with fixed-term employment. The subject clause
singles out one classification of OFWs and burdens it with a peculiar disadvantage.
LABOR STANDARDS under Atty. Joyrich Golangco
4. PEOPLE v PANIS
As we see it, the proviso was intended neither to impose a condition on the basic rule nor to provide an exception thereto
but merely to create a presumption. The presumption is that the individual or entity is engaged in recruitment and
placement whenever he or it is dealing with 2 or more persons to whom, in consideration of a fee, an offer or promise of
employment is made in the course of the “canvassing, enlisting, contracting, transporting, utilizing, hiring or procuring of
workers.”
The number of persons dealt with is NOT an essential ingredient of the act of recruitment and placement of workers. The
proviso merely lays down a rule of evidence that where a fee is collected in consideration of a promise or offer of
employment to 2 or more prospective workers, the individual or entity dealing with them shall be deemed to be engaged in
the act of recruitment and placement. The words “shall be deemed” create that presumption.
5. TRANS ACTION OVERSEAS CORP. v DOLE SECRETARY
Concurrent Jurisdiction of DOLE Secretary and POEA to Suspend or Cancel a License

The Court held that the power to suspend or cancel any license or authority to recruit employees for overseas employment
is concurrently vested with the POEA and the Secretary of Labor. Quoting the case of Eastern Assurance vs Sec. of Labor,
the Court explains that the penalties of suspension and cancellation of license or authority are prescribed for violations of
POEA rules, among other causes. The Secretary of Labor has the power under Art. 35 to supply these sanctions. He also
has the authority, under Art. 36, not only to restrict and regulate the recruitment and placement activities of all agencies, but
also to promulgate rules and regulations to carry out the objectives and implement provisions’ governing said activities.
Pursuant to this rule-making power, The Secretary of Labor authorized the POEA to conduct the necessary proceedings for
the suspension or cancellation of the license or authority of any agency or entity for certain offenses.
6. REPUBLIC v. PRINCIPALIA MANAGEMENT AND PERSONNEL CONSULTATIONS
Pending appeal with the Sec. of DOLE, Principalia has a clear and convincing right to operate as a recruitment agency.
POEA would have no authority to exercise its regulatory functions over Principalia because the matter had already been
brought to the jurisdiction of the DOLE. Thus, POEA’s action suspending Principalia’s license before final adjudication by
the DOLE would be premature and would amount to a violation of latter’s right to recruit and deploy workers.
7. DATUMAN vs FIRST COSMOPOLITAN MANPOWER
The signing of the "substitute" contracts with the foreign employer/principal before the expiration of the POEA-approved
contract and any continuation of petitioner's employment beyond the original one-year term, against the will of petitioner, are
continuing breaches of the original POEA-approved contract.
Private employment agency shall assume joint and solidary liability with the employer. The Supreme Court ruled that private
employment agencies are held jointly and severally liable with the foreign-based employer for any violation of the
recruitment agreement or contract of employment. This joint and solidary liability imposed by law against recruitment
agencies and foreign employers is meant to assure the aggrieved worker of immediate and sufficient payment of what is
due him. This is in line with the policy of the state to protect and alleviate the plight of the working class.
8. STOLT-NIELSEN TRANSPORTATION v MEDEQUILLO
Failure of the agency to deploy a worker within the prescribed period without valid reasons shall be a cause for suspension
or cancellation of license or fine. In addition, the agency shall return all documents at no cost to the worker.
The POEA Rules Governing the Recruitment and Employment of Seafarers do not provide for the award of damages to be
given in favor of the employees. The claim provided by the same law refers to a valid contractual claim for compensation or
benefits arising from employer-employee relationship or for any personal injury, illness or death at levels provided for within
the terms and conditions of employment of seafarers. However, the absence of the POEA Rules with regard to the payment
of damages to the affected seafarer does not mean that the seafarer is precluded from claiming the same. The sanctions
provided for non-deployment do not end with the suspension or cancellation of license or fine and the return of all
documents at no cost to the worker. As earlier discussed, they do not forefend a seafarer from instituting an action for
damages against the employer or agency which has failed to deploy him.
Section 10 of Republic Act No. 8042 (Migrant Workers Act) provides:

Sec. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of the National
Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to hear and decide, within
ninety (90) calendar days after the filing of the complaint, the claims arising out of an employer-employee
relationship or by virtue of any law or contract involving Filipino workers for overseas deployment including claims
for actual, moral, exemplary and other forms of damages.
9. PEOPLE v DELA PIEDRA
The number of persons dealt with is not an essential ingredient of the act of recruitment and placement of workers. Any of
the acts mentioned in the basic rule in Article 13(b) will constitute recruitment and placement even if only one prospective
worker is involved. The proviso merely lays down a rule of evidence that where a fee is collected in consideration of a
promise or offer of employment to two or more prospective workers, the individual or entity dealing with them shall be
deemed to be engaged in the act of recruitment and placement.
10. ESTATE OD NELSON DULAY v ABOITIZ
The NLRC has jurisdiction over claims or disputes between a foreign employer and an OFW. However, if the foreign
employer and the OFW are covered by a CBA, they are mandated to submit the claim or dispute to the original and
exclusive jurisdiction of the voluntary arbitrator or panel of arbitrators. It is only in the absence of a CBA that parties may
opt to submit the dispute to either the NLRC or to voluntary arbitration.
11. SANTIAGO v CF SHARP CREW MANAGEMENT
A distinction must be made between the perfection of the employment contract and the commencement of the employer-
employee relationship. Even before the start of any employer-employee relationship, contemporaneous with the perfection
of the employment contract was the birth of certain rights and obligations, the breach of which may give rise to a cause of
action against the erring party. Respondent’s act of preventing petitioner from departing the port of Manila and boarding
"MSV Seaspread" constitutes a breach of contract, giving rise to petitioner’s cause of action.
12. HON. STO TOMAS v SALAC
Congress may validly fix an alternative venue for violations of Section 9 of R.A. 8042 that differs from the venue established
by the Rules on Criminal Procedure –that a criminal action should be instituted in the place where the offense was
committed. Section 9 of R.A. 8042, as an exception to the rule on venue of criminal actions is, consistent with that law’s
declared policy of providing a criminal justice system that protects and serves the best interests of the victims of illegal
recruitment.
13. SAMEER OVERSEAS v JOY C CABILES
We are asked to determine whether the Court of Appeals erred when it affirmed the ruling of the National Labor Relations
Commission finding respondent illegally dismissed and awarding her three months’ worth of salary, the reimbursement of
the cost of her repatriation, and attorney’s fees despite the alleged existence of just causes of termination.
Doctrine: Sameer Overseas Placement Agency failed to show that there was just cause for causing Joy’s dismissal. The
employer, Wacoal, also failed to accord her due process of law.
Indeed, employers have the prerogative to impose productivity and quality standards at work.58 They may also impose
reasonable rules to ensure that the employees comply with these standards.59 Failure to comply may be a just cause for
their dismissal.60 Certainly, employers cannot be compelled to retain the services of an employee who is guilty of acts that
are inimical to the interest of the employer.61 While the law acknowledges the plight and vulnerability of workers, it does not
“authorize the oppression or self-destruction of the employer.”62 Management prerogative is recognized in law and in our
jurisprudence.
This prerogative, however, should not be abused. It is “tempered with the employee’s right to security of tenure.”63 Workers
are entitled to substantive and procedural due process before termination. They may not be removed from employment
without a valid or just cause as determined by law and without going through the proper procedure.
Article 282 of the Labor Code enumerates the just causes of termination by the employer. Thus:
Art. 282. Termination by employer. An employer may terminate an employment for any of the following causes:
(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or representative in
connection with his work;
(b) Gross and habitual neglect by the employee of his duties;
(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;
(d) Commission of a crime or offense by the employee against the person of his employer or any immediate member of
his family or his duly authorized representatives; and
(e) Other causes analogous to the foregoing.
Petitioner’s allegation that respondent was inefficient in her work and negligent in her duties69 may, therefore, constitute a
just cause for termination under Article 282(b), but only if petitioner was able to prove it.
To show that dismissal resulting from inefficiency in work is valid, it must be shown that: 1) the employer has set standards
of conduct and workmanship against which the employee will be judged; 2) the standards of conduct and workmanship
must have been communicated to the employee; and 3) the communication was made at a reasonable time prior to the
employee’s performance assessment.
WHEREFORE, the petition is DENIED. The decision of the Court of Appeals is AFFIRMED with modification. Petitioner
Sameer Overseas Placement Agency is ORDERED to pay respondent Joy C. Cabiles the amount equivalent to her salary
for the unexpired portion of her employment contract at an interest of 6% per annum from the finality of this judgment.
Petitioner is also ORDERED to reimburse respondent the withheld NT$3,000.00 salary and pay respondent attorney’s fees
of NT$300.00 at an interest of 6% per annum from the finality of this judgment.
14. MAERSK-FILIPINAS v AVESTRUZ
Maersk, A.P. Moller, and Agbayani (petitioners) claimed that during his stint on the vessel, Avestruz failed to attend to his
tasks, specifically to maintain the cleanliness of the galley, which prompted Captain Woodward to issue weekly reminders.
Unfortunately, despite the reminders, Avestruz still failed to perform his duties properly. On June 22, 2011, when again
asked to comply with the aforesaid duty, Avestruz became angry and snapped, retorting that he did not have time to do all
the tasks required of him. As a result, Captain Woodward initiated disciplinary proceedings and informed Avestruz during
the hearing of the offenses he committed, i.e., his repeated failure to follow directives pertaining to his duty to maintain the
cleanliness of the galley, as well as his act of insulting an officer. Thereafter, he was informed of his dismissal from service
due to insubordination. Relative thereto, Captain Woodward sent two (2) electronic mail messages (e-mails) to Maersk
explaining the decision to terminate Avestruz’s employment and requesting for Avestruz’s replacement. Avestruz was
discharged from the vessel and arrived in the Philippines on July 4, 2011.
Doctrine: After a punctilious examination of the evidence on record, the Court finds that the CA did not err in reversing and
setting aside the factual conclusions of the labor tribunals that Avestruz’s dismissal was lawful. Instead, the Court finds that
there was no just or valid cause for his dismissal, hence, he was illegally dismissed.
Insubordination, as a just cause for the dismissal of an employee, necessitates the concurrence of at least two requisites:
(1) the employee’s assailed conduct must have been willful, that is, characterized by a wrongful and perverse attitude; and
(2) the order violated must have been reasonable, lawful, made known to the employee, and must pertain to the duties
which he had been engaged to discharge.
In this case, the contents of Captain Woodward’s e-mails do not establish that Avestruz’s conduct had been willful, or
characterized by a wrongful and perverse attitude. The Court concurs with the CA’s observation that Avestruz’s statement
regarding the incident in the galley deserves more credence, being corroborated by Kong, a messman who witnessed the
same.
Similarly, the Court affirms the finding of the CA that Avestruz was not accorded procedural due process, there being no
compliance with the provisions of Section 17 of the POEA-SEC as above-cited, which requires the “two-notice rule.”
As explained in Skippers Pacific, Inc. v. Mira;
An erring seaman is given a written notice of the charge against him and is afforded an opportunity to explain or defend
himself. Should sanctions be imposed, then a written notice of penalty and the reasons for it shall be furnished the erring
seafarer. It is only in the exceptional case of clear and existing danger to the safety of the crew or vessel that the required
notices are dispensed with; but just the same, a complete report should be sent to the manning agency, supported by
substantial evidence of the findings.
In this case, there is dearth of evidence to show that Avestruz had been given a written notice of the charge against him, or
that he was given the opportunity to explain or defend himself. The statement given by Captain Woodward requiring him to
explain in writing the events that transpired at the galley in the morning of June 22, 2011 hardly qualifies as a written notice
of the charge against him, nor was it an opportunity for Avestruz to explain or defend himself. While Captain Woodward
claimed in his e-mail that he conducted a “disciplinary hearing” informing Avestruz of his inefficiency, no evidence was
presented to support the same.
Neither was Avestruz given a written notice of penalty and the reasons for its imposition. Instead, Captain Woodward
verbally informed him that he was dismissed from service and would be disembarked from the vessel. It bears stressing that
only in the exceptional case of clear and existing danger to the safety of the crew or vessel that the required notices may be
dispensed with, and, once again, records are bereft of evidence showing that such was the situation when Avestruz was
dismissed.
WHEREFORE, the petition is DENIED. The Decision dated January 4, 2013 and the Resolution dated April 16, 2013
rendered by the Court of Appeals in CA-G.R. SP No. 125773 are hereby AFFIRMED.
15. SUNACE INTERNATIONAL v NLRC, DIVINA MONTEHERMOZO
After her 12-month contract expired on February 1, 1998, Divina continued working for her Taiwanese employer, Hang Rui
Xiong, for two more years, after which she returned to the Philippines on February 4, 2000.
Doctrine: The theory of imputed knowledge ascribes the knowledge of the agent, Sunace, to the principal, employer Xiong,
not the other way around. The knowledge of the principal-foreign employer cannot, therefore, be imputed to its agent
Sunace.
There being no substantial proof that Sunace knew of and consented to be bound under the 2-year employment contract
extension, it cannot be said to be privy thereto. As such, it and its owner cannot be held solidarily liable for any of Divinas
claims arising from the 2-year employment extension. As the New Civil Code provides,
Contracts take effect only between the parties, their assigns, and heirs, except in case where the rights and obligations
arising from the contract are not transmissible by their nature, or by stipulation or by provision of law.
Furthermore, as Sunace correctly points out, there was an implied revocation of its agency relationship with its foreign
principal when, after the termination of the original employment contract, the foreign principal directly negotiated with Divina
and entered into a new and separate employment contract in Taiwan. Article 1924 of the New Civil Code reading
The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third
persons. WHEREFORE, the petition is GRANTED. The challenged resolutions of the Court of Appeals are hereby
REVERSED and SET ASIDE. The complaint of respondent Divina A. Montehermozo against petitioner is DISMISSED.
16. SAUDI ARABIAN AIRLINES v REBESENCIO
Respondents contended that the termination of their employment was illegal. They alleged that the termination was made
solely because they were pregnant.
As respondents alleged, they had informed Saudia of their respective pregnancies and had gone through the necessary
procedures to process their maternity leaves. Initially, Saudia had given its approval but later on informed respondents that
its management in Jeddah, Saudi Arabia had disapproved their maternity leaves. In addition, it required respondents to file
their resignation letters.
Doctrine:
I. Article II, Section 14 of the 1987 Constitution provides that "[t]he State ... shall ensure the fundamental equality before the
law of women and men." Contrasted with Article II, Section 1 of the 1987 Constitution's statement that "[n]o person shall ...
be denied the equal protection of the laws," Article II, Section 14 exhorts the State to "ensure." This does not only mean that
the Philippines shall not countenance nor lend legal recognition and approbation to measures that discriminate on the basis
of one's being male or female. It imposes an obligation to actively engage in securing the fundamental equality of men and
women.
The Convention on the Elimination of all Forms of Discrimination against Women (CEDAW), signed and ratified by the
Philippines on July 15, 1980, and on August 5, 1981, respectively, is part of the law of the land. In view of the widespread
signing and ratification of, as well as adherence (in practice) to it by states, it may even be said that many provisions of the
CEDAW may have become customary international law. The CEDAW gives effect to the Constitution's policy statement in
Article II, Section 14. Article I of the CEDAW defines "discrimination against women"
any distinction, exclusion or restriction made on the basis of sex which has the effect or purpose of impairing or nullifying the
recognition, enjoyment or exercise by women, irrespective of their marital status, on a basis of equality of men and women,
of human rights and fundamental freedoms in the political, economic, social, cultural, civil or any other field.
The constitutional exhortation to ensure fundamental equality, as illumined by its enabling law, the CEDAW, must inform
and animate all the actions of all personalities acting on behalf of the State. It is, therefore, the bounden duty of this court, in
rendering judgment on the disputes brought before it, to ensure that no discrimination is heaped upon women on the mere
basis of their being women. This is a point so basic and central that all our discussions and pronouncements — regardless
of whatever averments there may be of foreign law — must proceed from this premise.
So informed and animated, we emphasize the glaringly discriminatory nature of Saudia's policy. As argued by respondents,
Saudia's policy entails the termination of employment of flight attendants who become pregnant. At the risk of stating the
obvious, pregnancy is an occurrence that pertains specifically to women. Saudia's policy excludes from and restricts
employment on the basis of no other consideration but sex.
II. In Bilbao v. Saudi Arabian Airlines,101 this court defined voluntary resignation as "the voluntary act of an employee who
is in a situation where one believes that personal reasons cannot be sacrificed in favor of the exigency of the service, and
one has no other choice but to dissociate oneself from employment. It is a formal pronouncement or relinquishment of an
office, with the intention of relinquishing the office accompanied by the act of relinquishment." Thus, essential to the act of
resignation is voluntariness. It must be the result of an employee's exercise of his or her own will.
In the same case of Bilbao, this court advanced a means for determining whether an employee resigned voluntarily. As the
intent to relinquish must concur with the overt act of relinquishment, the acts of the employee before and after the alleged
resignation must be considered in determining whether he or she, in fact, intended, to sever his or her employment.
On the other hand, constructive dismissal has been defined as "cessation of work because 'continued employment is
rendered impossible, unreasonable or unlikely, as an offer involving a demotion in rank or a diminution in pay' and other
benefits."
In Penaflor v. Outdoor Clothing Manufacturing Corporation,constructive dismissal has been described as tantamount to
"involuntarily [sic] resignation due to the harsh, hostile, and unfavorable conditions set by the employer." In the same case,
it was noted that "[t]he gauge for constructive dismissal is whether a reasonable person in the employee's position would
feel compelled to give up his employment under the prevailing circumstances."
Applying the cited standards on resignation and constructive dismissal, it is clear that respondents were constructively
dismissed. Hence, their termination was illegal.
This case is REMANDED to the Labor Arbiter to make a detailed computation of the amounts due to respondents which
petitioner Saudi Arabian Airlines should pay without delay.
17. Republic of the Philippines v Principalia Management and Personnel Consultants
The trial court did not decree that the POEA, as the granting authority of Principalias license to recruit, is not allowed to
determine Principalias compliance with the conditions for the grant, as POEA would have us believe. For all intents and
purposes, POEA can determine whether the licensee has complied with the requirements. In this instance, the trial court
observed that the Order of Suspension dated March 15, 2004 was pending appeal with the Secretary of the Department of
Labor and Employment (DOLE). Thus, until such time that the appeal is resolved with finality by the DOLE, Principalia has a
clear and convincing right to operate as a recruitment agency.
Moreover, POEA would have no authority to exercise its regulatory functions over Principalia because the matter had
already been brought to the jurisdiction of the DOLE. Principalia has been granted the license to recruit and process
documents for Filipinos interested to work abroad. Thus, POEAs action of suspending Principalia’s license before final
adjudication by the DOLE would be premature and would amount to a violation of the latters right to recruit and deploy
workers
The presumption of regular performance of duty by the POEA under Section 3 (m), Rule 131 of the Rules of Court, finds no
application in the case at bar, as it applies only where a duty is imposed on an official to act in a certain way, and assumes
that the law tells him what his duties are. Therefore the presumption that an officer will discharge his duties according to law
does not apply where his duties are not specified by law and he is given unlimited discretion.
18. Century Canning Corp. vs Court of Appeals
The Labor Code defines an apprentice as a worker who is covered by a written apprenticeship agreement with an
employer. One of the objectives of Title II (Training and Employment of Special Workers) of the Labor Code is to establish
apprenticeship standards for the protection of apprentices. In line with this objective, Articles 60 and 61 of the Labor Code
provide:
ART. 60. Employment of apprentices. Only employers in the highly technical industries may employ
apprentices and only in apprenticeable occupations approved by the Minister of Labor and
Employment.
ART. 61. Contents of apprenticeship agreements. Apprenticeship agreements, including the wage rates of
apprentices, shall conform to the rules issued by the Minister of Labor and Employment. The period of
apprenticeship shall not exceed six months. Apprenticeship agreements providing for wage rates
below the legal minimum wage, which in no case shall start below 75 percent of the applicable
minimum wage, may be entered into only in accordance with apprenticeship programs duly
approved by the Minister of Labor and Employment. The Ministry shall develop standard model
programs of apprenticeship.
The TESDAs approval of the employers apprenticeship program is required before the employer is allowed to hire
apprentices. Prior approval from the TESDA is necessary to ensure that only employers in the highly technical industries
may employ apprentices and only in apprenticeable occupations. [19] Thus, under RA 7796, employers can only hire
apprentices for apprenticeable occupations which must be officially endorsed by a tripartite body and approved for
apprenticeship by the TESDA. This is to ensure the protection of apprentices and to obviate possible abuses by prospective
employers who may want to take advantage of the lower wage rates for apprentices and circumvent the right of the
employees to be secure in their employment.
The requisite TESDA approval of the apprenticeship program prior to the hiring of apprentices was further emphasized by
the DOLE with the issuance of Department Order No. 68-04 on 18 August 2004. Department Order No. 68-04, which
provides the guidelines in the implementation of the Apprenticeship and Employment Program of the government,
specifically states that no enterprise shall be allowed to hire apprentices unless its apprenticeship program is registered and
approved by TESDA.
19. Bernardo, et. al. vs. NLRC
The primary standard, therefore, of determining regular employment is the reasonable connection between the particular
activity performed by the employee in relation to the usual trade or business of the employer. The test is whether the former
is usually necessary or desirable in the usual business or trade of the employer. The connection can be determined by
considering the nature of the work performed and its relation to the scheme of the particular business or trade in its
entirety. Also if the employee has been performing the job for at least one year, even if the performance is not continuous
and merely intermittent, the law deems repeated and continuing need for its performance as sufficient evidence of the
necessity if not indispensability of that activity to the business. Hence, the employment is considered regular, but only with
respect to such activity, and while such activity exists.
20. Francisco vs NLRC
Thus, the determination of the relationship between employer and employee depends upon the circumstances of the whole
economic activity,[22] such as: (1) the extent to which the services performed are an integral part of the employers business;
(2) the extent of the workers investment in equipment and facilities; (3) the nature and degree of control exercised by the
employer; (4) the workers opportunity for profit and loss; (5) the amount of initiative, skill, judgment or foresight required for
the success of the claimed independent enterprise; (6) the permanency and duration of the relationship between the worker
and the employer; and (7) the degree of dependency of the worker upon the employer for his continued employment in that
line of business.
21. SONZA VS ABS CBN
The control test is the most important test our courts apply in distinguishing an employee from an independent contractor.
This test is based on the extent of control the hirer exercises over a worker. The greater the supervision and control the
hirer exercises, the more likely the worker is deemed an employee. The converse holds true as well – the less control the
hirer exercises, the more likely the worker is considered an independent contractor. To perform his work, SONZA only
needed his skills and talent. How SONZA delivered his lines, appeared on television, and sounded on radio were outside
ABS-CBN’s control. ABS-CBN did not instruct SONZA how to perform his job. ABS-CBN merely reserved the right to modify
the program format and airtime schedule "for more effective programming." ABS-CBN’s sole concern was the quality of the
shows and their standing in the ratings.
Clearly, ABS-CBN did not exercise control over the means and methods of performance of Sonza’s work. A radio broadcast
specialist who works under minimal supervision is an independent contractor. Sonza’s work as television and radio program
host required special skills and talent, which SONZA admittedly possesses.
22. JAVIER VS FLYACE CORP
It is on the employee who has the burden to pass the well-settled tests to determine the existence of an employer-employee
relationship, viz: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal;
and (4) the power to control the employees conduct. Of these elements, the most important criterion is whether the
employer controls or has reserved the right to control the employee not only as to the result of the work but also as to the
means and methods by which the result is to be accomplished. In this case, Javier was not able to persuade the Court that
the above elements exist in his case. He could not submit competent proof that Fly Ace engaged his services as a regular
employee; that Fly Ace paid his wages as an employee, or that Fly Ace could dictate what his conduct should be while at
work. In other words, Javier’s allegations did not establish that his relationship with Fly Ace had the attributes of an
employer-employee relationship on the basis of the above-mentioned four-fold test. Worse, Javier was not able to refute Fly
Aces assertion that it had an agreement with a hauling company to undertake the delivery of its goods. It was also baffling
to realize that Javier did not dispute Fly Aces denial of his services exclusivity to the company. In short, all that Javier laid
down were bare allegations without corroborative proof.
23. SMCEU VS JUDGE BERSAMIRA
A labor dispute can nevertheless exist regardless of whether the disputants stand in the proximate relationship of
employer and employee provided the controversy concerns, among others, the terms and conditions of employment or a
"change" or "arrangement" thereof. Put differently, and as defined by law, the existence of a labor dispute is not determined
by the fact that the plaintiffs and defendants do not stand in the proximate relation of employer and employee. Hence a
labor dispute, as defined by the law, does exist here is evident. What the Union seeks is to regularize the status of the
employees contracted by Lipercon and D'Rite in effect, that they be absorbed into the working unit of SanMig. This matter
definitely dwells on the working relationship between said employees vis-a-vis SanMig. Terms, tenure and conditions of
their employment and the arrangement of those terms are thus involved bringing the matter within the purview of a labor
dispute. Further, the Union also seeks to represent those workers, who have signed up for Union membership, for the
purpose of collective bargaining. As the case is indisputably linked with a labor dispute, jurisdiction belongs to the labor
tribunals.
24. LOCSIN ET. AL VS PLDT
While respondent and SSCP no longer had any legal relationship with the termination of the Agreement, petitioners
remained at their post securing the premises of respondent while receiving their salaries, allegedly from SSCP. Hence it is
but reasonable to conclude that, with the behest and, presumably, directive of respondent, petitioners continued with their
services. Evidently, such are indicia of control that respondent exercised over petitioners. The respondent having the power
of control over petitioners must be considered as petitioners’ employer from the termination of the Agreement onwards as
this was the only time that any evidence of control was exhibited by respondent over petitioners. Such power of control has
been explained as the right to control not only the end to be achieved but also the means to be used in reaching such end.
With the conclusion that respondent directed petitioners to remain at their posts and continue with their duties, it is clear that
respondent exercised the power of control over them; thus, the existence of an employer-employee relationship.
25. People's Broadcasting Service v. Secretary of Labor, March 6, 2012

May the DOLE make a determination of whether or not an employer-employee relationship exists, and if so, to what
extent?
No limitation in the law was placed upon the power of the DOLE to determine the existence of an employer-employee
relationship. No procedure was laid down where the DOLE would only make a preliminary finding, that the power was
primarily held by the NLRC. The law did not say that the DOLE would first seek the NLRC’s determination of the existence
of an employer-employee relationship, or that should the existence of the employer-employee relationship be disputed, the
DOLE would refer the matter to the NLRC.
The DOLE, in determining the existence of an employer-employee relationship, has a ready set of guidelines to follow, the
same guide the courts themselves use. The elements to determine the existence of an employment relationship are: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; (4) the employer’s power
to control the employee’s conduct. The use of this test is not solely limited to the NLRC. Under Art. 128(b) of the Labor
Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to the existence of an employer-
employee relationship in the exercise of its visitorial and enforcement power, subject to judicial review, not review by the
NLRC.
26. Ymbong v. ABS-CBN, March 7, 2012
What is involved in this case is an unwritten company policy considering any employee who files a certificate of candidacy
for any elective or local office as resigned from the company. Although Section 11(b) of R.A. No. 6646 does not require
mass media commentators and announcers such as private respondent to resign from their radio or TV stations but only to
go on leave for the duration of the campaign period, we think that the company may nevertheless validly require them to
resign as a matter of policy. In this case, the policy is justified on the following grounds: (a) Working for the government and
the company at the same time is clearly disadvantageous and prejudicial to the rights and interest not only of the company
but the public as well. In the event an employee wins in an election, he cannot fully serve, as he is expected to do, the
interest of his employer. The employee has to serve two (2) employers, obviously detrimental to the interest of both the
government and the private employer, (b) In the event the employee loses in the election, the impartiality and cold neutrality
of an employee as broadcast personality is suspect, thus readily eroding and adversely affecting the confidence and trust of
the listening public to employer’s station. Thus, ABS-CBN has a valid legal ground to dismiss Ymbong and Patalinhug.
27. Professional Services v. Court of Appeals, February 11, 2008
The case involves the hysterectomy procedure done to patient Natividad Nagana, however, the said operation appeared to
be flawed after remarks that 2 sponges were missing despite diligent search. The issue is whether or not PSI may be held
liable for medical malpractice?
While in theory a hospital as a juridical entity cannot practice medicine, in reality it utilizes doctors, surgeons and medical
practitioners in the conduct of its business of facilitating medical and surgical treatment. Within that reality, three legal
relationships crisscross: 1) between the hospital and the doctor practicing within its premises; 2) between the hospital and
the patient being treated or examined within its premises; and 3) between the patient and the doctor. Regardless of its
relationship with the doctor, the hospital may be held directly liable to the patient for its own negligence or failure to follow
established standard of conduct to which it should conform as a corporation.
28. South East International Rattan Inc. v. Coming, March 12, 2014
JJ Coming filed a complaint for illegal dismissal, underpayment of wages, non-payment of holiday pay, 13th month pay, and
SIL, with prayer for reinstatement, back wages, damages and attorney's fees. Rattan Inc. denied having hired Coming,
showing that he failed to present a single pay slip, voucher or copy of a company payroll showing that he rendered service,
nor was he in the list of employees reported to the SSS.
In resolving the issue of whether such relationship exists in a given case, substantial evidence - that amount of relevant
evidence which a reasonable mind might accept as adequate to justify a conclusion - is sufficient. Although no particular
form of evidence is required to prove the existence of EER, and any competent and relevant evidence to prove the
relationship may be admitted, a finding that the relationship exists must nonetheless rest on substantial evidence. To
ascertain the existence of EER, jurisprudence has invariably adhered to the four-fold test.
29. TENEZAS ET.AL. VS VILLEGAS TAXI TRANSPORT
It is an oft-repeated rule that in labor cases, as in other administrative and quasi-judicial proceedings, "the quantum of proof
necessary is substantial evidence, or such amount of relevant evidence which a reasonable mind might accept as adequate
to justify a conclusion. T]he burden of proof rests upon the party who asserts the affirmative of an issue. Corollarily, as
Francisco was claiming to be an employee of the respondents, it is incumbent upon him to proffer evidence to prove the
existence of said relationship.
"[I]n determining the presence or absence of an employer-employee relationship, the Court has consistently looked for the
following incidents, to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of
dismissal; and (d) the employer’s power to control the employee on the means and methods by which the work is
accomplished. The last element, the so-called control test, is the most important element.
There is no hard and fast rule designed to establish the aforesaid elements. Any competent and relevant evidence to prove
the relationship may be admitted. Identification cards, cash vouchers, social security registration, appointment letters or
employment contracts, payrolls, organization charts, and personnel lists, serve as evidence of employee status.
No particular form of evidence is required to prove the existence of an employer-employee relationship. Any competent and
relevant evidence to prove the relationship may be admitted. For, if only documentary evidence would be required to show
that relationship, no scheming employer would ever be brought before the bar of justice, as no employer would wish to
come out with any trace of the illegality he has authored considering that it should take much weightier proof to invalidate a
written instrument.
30. TONGKO VS MANUFACTURER'S LIFE INSURANCE
In the determination of whether an employer-employee relationship exists between two parties, this court applies the four-
fold test. Jurisprudence is firmly settled that whenever the existence of an employment relationship is in dispute, four
elements constitute the reliable yardstick: (1) the selection and engagement of the employee; (2) the payment of wages; (3)
the power of dismissal; (4) the emplpyer's power to control the employee's conduct. The so called control test which
constitutes the most important index if existence of the employer-employee relationship that is, whether the employer
controls or has reserved the right to control the employee not only as to the result of the work to be done but also as to the
means and methods by which the same is accomplished. In the case at bar, the absence of evidence showing Manulife's
control over Tongko's contractual duties points to the absence of employer-employee relationship between TONGKO and
Manulife. Moreover, Tongko remained an agent all along; although his subsequent duties made him a lead agent with
leadership role, he was nevertheless only an agent whose basis contract yields no evidence of means-and-manner control.
31. TAPE INC VS SERVANA
Jurisprudence is abound with cases that recite the factors to be considered in determining the existence of employer-
employee relationship, namely: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power
of dismissal; and (d) the employer's power to control the employee with respect to the means and method by which the work
is to be accomplished. The most important factor involves the control test. Under the control test, there is an employer-
employee relationship when the person for whom the services are performed reserves the right to control not only the end
achieved but also the manner and means used to achieve that end.
The theory of private respondents that petitioner is an independent contractor runs counter to their very own allegation that
petitioner is a talent or a program employee. An independent contractor is not an employee of the employer, while a talent
or program employee is an employee. The only difference between a talent or program employee and a regular employee is
the fact that a regular employee is entitled to all the benefits that are being prayed for.
More importantly, respondent had been continuously under the employ of TAPE from 1995 until his termination in March
2000, or for a span of 5 years. Regardless of whether or not respondent had been performing work that is necessary or
desirable to the usual business of TAPE, respondent is still considered a regular employee under Article 280 of the Labor
Code which provides:
Art. 280. Regular and Casual Employment.The provisions of written agreement to the contrary notwithstanding and
regardless of the oral agreement of the parties, an employment shall be deemed to be regular where the employee has
been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer,
except where the employment has been fixed for a specific project or undertaking the completion or termination of which
has been determined at the time of engagement of the employee or where the work or service to be performed is seasonal
in nature and employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the preceding paragraph. Provided, that, any employee
who has rendered at least one year of service, whether such service is continuous or broken, shall be considered a regular
employee with respect to the activity in which he is employed and his employment shall continue while such activity exists.
32. ENCYCLOPEDIA BRITANNICA VS NLRC
Control of employee’s conduct is commonly regarded as the most crucial and determinative indicator of the presence or
absence of an employer-employee relationship. Under this, an employer-employee relationship exists where the person for
whom the services are performed reserves the right to control not only the end to be achieved, but also the manner and
means to be used in reaching that end.
The fact that petitioner issued memoranda to private respondent and to other division sales managers did not prove that
petitioner had actual control over them. The different memoranda were merely guidelines on company policies which the
sales managers follow and impose on their respective agents.
33. Atok Big Wedge Co. Inc. v. Gison
Case Doctrine: Employee-Employer Relationship – Control Test
Facts: Gison was hired as a part-time consultant of Atok Big Wedge for 11 years. He is being paid a retainer fee for his
services. Gison requested that petitioner cause his registration with the Social Security System (SSS), but petitioner did not
accede to his request. He later reiterated his request but it was ignored by respondent considering that he was only a
retainer/consultant.
Issue: whether there exists an EE relationship between Gison and Atok Big Wedge.
Held: Well-entrenched is the doctrine that the existence of the EE relationshop is ultimalely a question of fact and findings
thereon of the Labro Arbiter and the NLRC shall be accorded not only respect but even finality when supported by
substantial evidence. To ascertain the existence of an EE relationship, jurisprudence has invariably adhered to the four-fold
test, to wit:
1. The selection and engagement of the employee

2. The payment of wages
3. Power of dismissal
4. Power to control the employee’s conduct or the so-called control test
Control Test is commonly regarded as the most crucial and determinative indicator of the presence or absence of an EE
relationship. Under the control test, an EE relationship exists where the person for whom the services are performed
reserves the right to control not only the end achieved but also, the manner and means to be used in reaching that end.
34. Dumpit-Murillo v. CA
Case Doctrine: Regular status arises from either the nature of work of the employee or the duration of his employment.
Facts: ABC hired petitioner Thelma Dumpit-Murillo as a newscaster and co-anchor for Balitang-Balita. The contract was for
a period of three months. After 4 years of repeated renewals, petitioners talent contract expired. Two weeks after the
expiration of the last contract, petitioner sent a letter to Mr. Jose Javier, Vice President for News and Public Affairs of ABC,
informing the latter that she was still interested in renewing her contract subject to a salary increase. Thereafter, petitioner
stopped reporting for work. She sent a letter reiterating her request and also stated that the absence of any response from
ABC will mean that they have constructively dismissed her. A month later, petitioner sent a demand letter to ABC,
demanding: (a) reinstatement to her former position; (b) payment of unpaid wages for services rendered from September 1
to October 20, 1999 and full backwages; (c) payment of 13th month pay, vacation/sick/service incentive leaves and other
monetary benefits due to a regular employee starting March 31, 1996. ABC replied that a check covering petitioner’s talent
fees for September 16 to October 20, 1999 had been processed and prepared, but that the other claims of petitioner had no
basis in fact or in law.
Issue: whether the Dumpit-Murillo is a regular employee or a fixed-term employee.

Held: Concerning regular employment, the law provides for two kinds of employees, namely: (1) those who are engaged to
perform activities which are usually necessary or desirable in the usual business or trade of the employer; and (2) those
who have rendered at least one year of service, whether continuous or broken, with respect to the activity in which they are
employed. Regular status arises from either the nature of work of the employee or the duration of his employment. In our
view, the requisites for regularity of employment have been met in the instant case. Dumpit-Murillo’s work was necessary or
desirable in the usual business or trade of the employer which includes, as a pre-condition for its enfranchisement, its
participation in the governments news and public information dissemination. In addition, her work was continuous for a
period of four years. This repeated engagement under contract of hire is indicative of the necessity and desirability of the
petitioners work in private respondent ABCs business. Being one of the numerous newscasters/broadcasters of ABC and
desiring to keep her job as a broadcasting practitioner, petitioner was left with no choice but to affix her signature of
conformity on each renewal of her contract as already prepared by private respondents; otherwise, private respondents
would have simply refused to renew her contract. Patently, the petitioner occupied a position of weakness vis--vis the
employer. Moreover, private respondents practice of repeatedly extending petitioners 3-month contract for four years is a
circumvention of the acquisition of regular status. Hence, there was no valid fixed-term employment between petitioner and
private respondents. While this Court has recognized the validity of fixed-term employment contracts in a number of cases,
it has consistently emphasized that when the circumstances of a case show that the periods were imposed to block the
acquisition of security of tenure, they should be struck down for being contrary to law, morals, good customs, public order or
public policy.
35. Bernarte v. PBA
Case Doctrine: Employee-Employer Relationship – Control Test
Facts: Complainants (Jose Mel Bernarte and Renato Guevarra) aver that they were invited to join the PBA as referees.
During the leadership of Commissioner Emilio Bernardino, they were made to sign contracts on a year-to-year basis. On
January 15, 2004, Bernarte received a letter from the Office of the Commissioner advising him that his contract would not
be renewed citing his unsatisfactory performance on and off the court. Complainants went to the Labor Arbiter, who
affirmed that they were illegally dismissed by PBA. The decision was held by the NLRC upon appeal. However, the Court of
Appeals overturned the decision of the NLRC and Labor Arbiter in favor of PBA. The Court of Appeals found petitioner an
independent contractor since respondents did not exercise any form of control over the means and methods by which
petitioner performed his work as a basketball referee.
Issue: Was there an employee-employer relationship in this case?
Held: To determine the existence of an employer-employee relationship, case law has consistently applied the four-fold test,
to wit: (a) the selection and engagement of the employee; (b) the payment of wages; (c) the power of dismissal; and (d) the
employers power to control the employee on the means and methods by which the work is accomplished. The referees
decide whether an infraction was committed, and the PBA cannot overrule them once the decision is made on the playing
court. The referees are the only, absolute, and final authority on the playing court. Respondents or any of the PBA officers
cannot and do not determine which calls to make or not to make and cannot control the referee when he blows the whistle
because such authority exclusively belongs to the referees. The very nature of petitioners’ job of officiating a professional
basketball game undoubtedly calls for freedom of control by respondents.
36. Jardin v. NLRC

Case Doctrine: Existence of EE Relationship only allows the termination of employment only due to just and authorized
cause and must be effected according to law
Facts: Petitioners were drivers of private respondent, Philjama International Inc., a domestic corporation engaged in the
operation of "Goodman Taxi." Petitioners used to drive private respondent's taxicabs every other day on a 24-hour work
schedule under the boundary system. Under this arrangement, the petitioners earned an average of P400.00 daily.
Nevertheless, private respondent admittedly regularly deducts from petitioners, daily earnings the amount of P30.00
supposedly for the washing of the taxi units. Believing that the deduction is illegal, petitioners decided to form a labor union
to protect their rights and interests. Upon learning about the plan of petitioners, private respondent refused to let petitioners
drive their taxicabs when they reported for work on August 6, 1991, and on succeeding days. Petitioners suspected that
they were singled out because they were the leaders and active members of the proposed union. Aggrieved, petitioners
filed with the labor arbiter a complaint against private respondent for unfair labor practice and illegal dismissal.
Issue: Was there EE relationship? Were the drivers dismissed illegally?
Held: We ruled that the relationship between jeepney owners/operators on one hand and jeepney drivers on the other under
the boundary system is that of employer-employee and not of lessor-lessee. We explained that in the lease of chattels, the
lessor loses complete control over the chattel leased although the lessee cannot be reckless in the use thereof, otherwise
he would be responsible for the damages to the lessor. In the case of jeepney owners/operators and jeepney drivers, the
former exercise supervision and control over the latter. The management of the business is in the owner's hands. The
owner as holder of the certificate of public convenience must see to it that the driver follows the route prescribed by the
franchising authority and the rules promulgated as regards its operation. Now, the fact that the drivers do not receive fixed
wages but get only that in excess of the so-called "boundary" they pay to the owner/operator is not sufficient to withdraw the
relationship between them from that of employer and employee. We have applied by analogy the above-stated doctrine to
the relationships between bus owner/operator and bus conductor, auto-calesa owner/operator and driver, and recently
between taxi owners/operators and taxi drivers. Hence, petitioners are undoubtedly employees of private respondent
because as taxi drivers they perform activities which are usually necessary or desirable in the usual business or trade of
their employer. As consistently held by this Court, termination of employment must be effected in accordance with law. The
just and authorized causes for termination of employment are enumerated under Articles 282, 283 and 284 of the Labor
Code. The requirement of notice and hearing is set-out in Article 277 (b) of the said Code. Hence, petitioners, being
employees of private respondent, can be dismissed only for just and authorized cause, and after affording them notice and
hearing prior to termination. In the instant case, private respondent had no valid cause to terminate the employment of
petitioners. Neither was there two (2) written notices sent by private respondent informing each of the petitioners that they
had been dismissed from work. There was a lack of valid cause and failure on the part of private respondent to comply with
the twin-notice requirement underscored the illegality surrounding petitioners' dismissal.
37. Chavez v. NLRC
- The existence of an employer-employee relationship cannot be negated by expressly repudiating it in a contract and
providing therein that the employee is an independent contractor where, in the case, the facts clearly show otherwise.
Indeed, the employment status of a person is defined and prescribed by law and not by what the parties said it should be.
38. Gabriel v. Bilon

- The relationship between jeepney owners/operators and jeepney drivers under the boundary system is that of employer-
employee relationship and not of a lessor-lessee. In a lessor-lessee relationship, there is lack of control over the chattels. In
a employer-employee relationship, the former exercises control over the latter. That fact that the drivers do not receive their
fixed wages but only the excess of the boundary itself is not sufficient to withdraw the relationship. Such jeepney drivers
engaged to perform activities, which were usually necessary or desirable in the usual business or trade of the employer.
39. Coca-Cola Bottlers (Phils.) v. Climaco
- There is no relationship between the company and the plant physician because there is lack of control of the company
over the physician. Under their Retainer Agreement lies the Comprehensive Medical Plan, which contains the respondent’s
objectives, duties, and obligations does not tell the respondent physician, “how to conduct his physical examination, how to
immunize, or how to diagnose and treat his patients, employees of the company in each case”. In addition, the
comprehensive Medical Plan only provides guidelines merely to ensure that the end result was achieved, but did not control
the means and methods by which the physician performed his assigned tasks.
40. Felix v. Buenaseda
- The nature of the contracts of resident physicians meet traditional test for determining employer-employee relationship, but
because the focus of residency is training, they are neither here nor there. Moreover, stringent standards and requirements
for renewal of specialist-rank positions or for promotion to the next post-graduate residency year are necessary because
lives are ultimately at stake.
41. AUTOBUS TRANSPORT SYSTEM vs. BAUTISTA (2005) G.R. 156364
Facts: Respondent Antonio Bautista has been employed by petitioner Auto Bus Transport Systems, Inc., since May 1995,
as driver-conductor with travel routes Manila-Tuguegarao via Baguio, Baguio-Tuguegarao via Manila and Manila-Tabuk via
Baguio. Respondent was paid on commission basis, seven percent (7%) of the total gross income per travel, on a twice a
month basis.
On January 2000, while respondent was driving Autobus No. 114 along Sta. Fe, Nueva Vizcaya, the bus he was driving
accidentally bumped the rear portion of Autobus No. 124, as the latter vehicle suddenly stopped at a sharp curve without
giving any warning. Respondent averred that the accident happened because he was compelled by the management to go
back to Roxas, Isabela, although he had not slept for almost twenty-four (24) hours, as he had just arrived in Manila from
Roxas, Isabela.
Respondent further alleged that he was not allowed to work until he fully paid the amount of P75,551.50, representing thirty
percent (30%) of the cost of repair of the damaged buses and that despite respondent's pleas for reconsideration, the same
was ignored by management. After a month, management sent him a letter of termination. Thus, on 02 February 2000,
respondent instituted a Complaint for Illegal Dismissal with Money Claims for nonpayment of 13th month pay and service
incentive leave pay against Autobus.
Issue: WON respondent is entitled to service incentive leave.
Held: The respondent is entitled to service incentive leave.

The disposition of the issue revolves around the proper interpretation of Article 95 of the Labor Code vis-à-vis Section 1(D),
Rule V, Book III of the Implementing Rules and Regulations of the Labor Code which provides: RIGHT TO SERVICE
INCENTIVE LEAVE, (a) Every employee who has rendered at least one year of service shall be entitled to a yearly service
incentive leave of five days with pay.
Moreover, Book III, Rule V: SERVICE INCENTIVE LEAVE also states that this rule shall apply to all employees except: (d)
Field personnel and other employees whose performance is unsupervised by the employer including those who are
engaged on task or contract basis, purely commission basis, or those who are paid in a fixed amount for performing work
irrespective of the time consumed in the performance thereof;
A careful examination of said provisions of law will result in the conclusion that the grant of service incentive leave has been
delimited by the Implementing Rules and Regulations of the Labor Code to apply only to those employees not explicitly
excluded by Section 1 of Rule V. According to the Implementing Rules, Service Incentive Leave shall not apply to
employees classified as "field personnel."
The phrase "other employees whose performance is unsupervised by the employer" must not be understood as a separate
classification of employees to which service incentive leave shall not be granted. Rather, it serves as an amplification of the
interpretation of the definition of field personnel under the Labor Code as those "whose actual hours of work in the field
cannot be determined with reasonable certainty."
The same is true with respect to the phrase "those who are engaged on task or contract basis, purely commission basis."
Said phrase should be related with "field personnel," applying the rule on ejusdem generis that general and unlimited terms
are restrained and limited by the particular terms that they follow. Hence, employees engaged on task or contract basis or
paid on purely commission basis are not automatically exempted from the grant of service incentive leave, unless, they fall
under the classification of field personnel.
What must be ascertained in order to resolve the issue of propriety of the grant of service incentive leave to respondent is
whether or not he is a field personnel.
According to Article 82 of the Labor Code, "field personnel" shall refer to non-agricultural employees who regularly perform
their duties away from the principal place of business or branch office of the employer and whose actual hours of work in the
field cannot be determined with reasonable certainty. This definition is further elaborated in the Bureau of Working
Conditions (BWC), Advisory Opinion to Philippine Technical-Clerical Commercial Employees Association 10 which states
that:
As a general rule, field personnel are those whose performance of their job/service is not supervised by the employer or his
representative, the workplace being away from the principal office and whose hours and days of work cannot be determined
with reasonable certainty; hence, they are paid specific amount for rendering specific service or performing specific work. If
required to be at specific places at specific times, employees including drivers cannot be said to be field personnel despite
the fact that they are performing work away from the principal office of the employee.
At this point, it is necessary to stress that the definition of a "field personnel" is not merely concerned with the location where
the employee regularly performs his duties but also with the fact that the employee's performance is unsupervised by the
employer. As discussed above, field personnel are those who regularly perform their duties away from the principal place of
business of the employer and whose actual hours of work in the field cannot be determined with reasonable certainty. Thus,
in order to conclude whether an employee is a field employee, it is also necessary to ascertain if actual hours of work in the
field can be determined with reasonable certainty by the employer. In so doing, an inquiry must be made as to whether or
not the employee's time and performance are constantly supervised by the employer. Respondent is not a field personnel
but a regular employee who performs tasks usually necessary and desirable to the usual trade of petitioner's business.
Accordingly, respondent is entitled to the grant of service incentive leave.
The clear policy of the Labor Code is to grant service incentive leave pay to workers in all establishments, subject to a few
exceptions. Section 2, Rule V, Book III of the Implementing Rules and Regulations provides that "every employee who has
rendered at least one year of service shall be entitled to a yearly service incentive leave of five days with pay."
Service incentive leave is a right which accrues to every employee who has served "within 12 months, whether continuous
or broken reckoned from the date the employee started working, including authorized absences and paid regular holidays
unless the working days in the establishment as a matter of practice or policy, or that provided in the employment contracts,
is less than 12 months, in which case said period shall be considered as one year." It is also "commutable to its money
equivalent if not used or exhausted at the end of the year." In other words, an employee who has served for one year is
entitled to it. He may use it as leave days or he may collect its monetary value. To limit the award to three years, as the
solicitor general recommends, is to unduly restrict such right.
42. ARIEL L. DAVID vs. JOHN G. MACASIO (JULY 2, 2014) G.R. No. 195466
Facts: In January 2009, Macasio filed before the LA a complaint against petitioner Ariel L. David, doing business under the
name and style “Yiels Hog Dealer,” for non-payment of overtime pay, holiday pay and 13th month pay. He also claimed
payment for moral and exemplary damages and attorney’s fees. Macasio also claimed payment for service incentive leave
(SIL) David claimed that he started his hog dealer business in 2005 and that he only has ten employees. The LA concluded
that as Macasio was engaged on “pakyaw” or task basis, he is not entitled to overtime, holiday, SIL and 13th month pay.
The NLRC affirmed the LA decision, thus this case reach the CA which says that Macasio is entitled to his monetary claims
following the doctrine laid down in Serrano v. Severino Santos Transit.The CA explained that as a task basis employee,
Macasio is excluded from the coverage of holiday, SIL and 13th month pay only if he is likewise a “field personnel.”Thus this
case reached the SC.
Issue: Whether or not Macasio is entitled of overtime pay, holiday pay, 13 th month pay and payment for service incentive
leave.
Held: Yes, in so far as the Holiday and SIL pay is concern. To determine whether workers engaged on “pakyaw” ortask
basis” is entitled to holiday and SIL pay, the presence (or absence) of employer supervision as regards the worker’s time
and performance is the key: if the worker is simply engaged on pakyaw or task basis, then the general rule is that he is
entitled to a holiday pay and SIL pay unless exempted from the exceptions specifically provided under Article 94 (holiday
pay) and Article 95 (SIL pay) of the Labor Code. However, if the worker engaged on pakyaw or task basis also falls within
the meaning of “field personnel” under the law, then he is not entitled to these monetary benefits. CA that Macasio does not
fall under the definition of “field personnel.” The CA’s finding in this regard is supported by the established facts of this case:
first, Macasio regularly performed his duties at David’s principal place of business; second, his actual hours of work could
be determined with reasonable certainty; and, third, David supervised his time and performance of duties. Since Macasio
cannot be considered a “field personnel,” then he is not exempted from the grant of holiday, SIL pay even as he was
engaged on “pakyaw” or task basis.
However, the governing law on 13th month pay is PD No. 851. As with holiday and SIL pay, 13th month pay benefits
generally cover all employees; an employee must be one of those expressly enumerated to be exempted. Section 3 of the
Rules and Regulations Implementing P.D. No. 851 enumerates the exemptions from the coverage of 13th month pay
benefits. Under Section 3(e), “employers of those who are paid on task basis, and those who are paid a fixed amount for
performing a specific work, irrespective of the time consumed in the performance thereof are exempted. Note that unlike the
IRR of the Labor Code on holiday and SIL pay, Section 3(e) of the Rules and Regulations Implementing PD No.
851exempts employees "paid on task basis" without any reference to "field personnel." This could only mean that insofar as
payment of the 13th month pay is concerned, the law did not intend to qualify the exemption from its coverage with the
requirement that the task worker be a "field personnel" at the same time. Thus Macasio is not entitled to 13 th month pay.
Wherefore, the petition was partially granted the petition insofar as the payment of 13th month pay to respondent is
concerned. But all other aspect of the CA’s decision was affirmed.
43. BEGINO ET AL vs. ABS-CBN CORPORATION (April 20, 2015) G.R. No. 199166
Facts: Petitioners in this case were employed by ABS-CBN Corp., through its Regional Network Group in Naga. Their
engagements were covered by Talent Contracts that stipulated employment periods from three months to one year and
were regularly renewed over the years. They were given Project Assignment Forms that described the duration of a
particular project, its budget and technical requirements.
Although their contracts stated that “nothing therein shall be deemed or construed to establish an employer-employee
relationship between the parties,” they had to perform their work in accordance with ABS-CBN’s professional standards, and
were barred from engaging in similar work for a person or entity directly in competition with or adverse to the interests of
ABS-CBN or promoting any product or service without its prior written consent. Their remuneration was described as talent
fees and deducted a contractor’s tax.
Claiming regular employee status, they filed a complaint with the National Labor Relations Commission (NLRC) against the
company for regularization, underpayment of overtime pay, holiday pay, 13th month pay, service incentive leave pay and
damages.
ABS-CBN countered that the complainants were independent contractors, or talents, who informed of the company of their
availability and were required to accomplish Talent Information Forms to facilitate their engagement on designated project
days. The company also stated that, since they were engaged on the basis of their skills or expertise, the degree of control
it exercised on them was “limited to the imposition of general guidelines on conduct and performance, simply for the
purpose of upholding the standards of the company and the strictures of the industry.
While the complaint was pending, ABS-CBN terminated their employment.
Issue: Whether or not petitioners and ABS-CBN had an employer-employee relationship
Held: Petitioners are regular employees of ABS-CBN.
The practice of having fixed-term contracts in the industry does not automatically make all talent contracts valid and
compliant with labor law, it has, consequently, been ruled that the assertion that a talent contract exists does not necessarily
prevent a regular employment status.
It was immaterial their services were engaged for specific periods to sustain the company’s TV Patrol Bicol newscast and
that they were paid according to the budget allocated for the program. The fact remains that, from their initial engagement
as cameramen, editors and reporters, they were continuously re-hired by the company over the years.
The Supreme Court said that if the employee has been performing the job for at least one year, even if the performance is
not continuous or merely intermittent, the law deems the repeated or continuing performance as sufficient evidence of the
necessity, if not indispensability of that activity in the business. On the issue of control and supervision over the employee’s
work, which is critical in determining the existence of employer-employee relationship, the justices said the company’s own
rules validated the employees’ claim.
They were required to attend and participate in all promotional campaigns of their assigned programs, and to perform their
functions at the locations and in accordance with the schedules set by the company. It was shown that the petitioners
perform functions necessary and essential to the business of ABS-CBN which repeatedly employed them for a long-running
news program of its Regional Network Group in Naga City. In the course of said employment, petitioners were provided the
equipment they needed, were required to comply with the Company's policies which entailed prior approval and evaluation
of their performance.
For these reasons, the tribunal upheld the ruling of the NLRC that the complainants are regular employees of ABS-CBN, not
independent contractors or talents, and therefore entitled to all the rights and benefits that accrue to that status.
44. CHEVRON PHILS., INC. vs. GALIT
Facts: On March 20, 2006, herein respondent filed against Caltex Philippines, Inc., now Chevron Phils., Inc., SJS and Sons
Construction Corporation (SJS), and its president, Reynaldo Salomon (Salomon), a Complaint for illegal dismissal,
underpayment/non-payment of 13th month pay, separation pay and emergency cost of living allowance.
Galit alleged that: he is a regular and permanent employee of Chevron since 1982, having been assigned at the company's
Pandacan depot; he is an "all-around employee" whose job consists of cleaning the premises of the depot, changing
malfunctioning oil gaskets, transferring oil from containers and other tasks that management would assign to him; in the
performance of his duties, he was directly under the control and supervision of Chevron supervisors; on January 15, 2005,
he was verbally informed that his employment is terminated but was promised that he will be reinstated soon; for several
months, he followed up his reinstatement but was not given back his job.
SJS claimed that: it is a company which was established in 1993 and was engaged in the business of providing manpower
to its clients on a "per project/contract" basis; Galit was hired by SJS in 1993 as a project employee and was assigned to
Chevron, as a janitor, based on a contract between the two companies; contrary to Galit's allegation, he started working for
SJS only in 1993; the manpower contract between SJS and Chevron eventually ended on November 30, 2004 which
resulted in the severance of Galit's employment; SJS finally closed its business operations in December 2004; it retired from
doing business in Manila on January 21, 2005; Galit was paid separation pay of P11,000.00.
On the other hand, petitioner contended in its Position Paper with Motion to Dismiss that: it entered into two (2) contracts
for-janitorial services with SJS from May 1, 2001 to April 30, 2003 and from June 1, 2003 to June 1, 2004; under these
contracts, SJS undertook to "assign such number of its employees, upon prior .agreement with [petitioner], as would be
sufficient to fully and effectively render the work and services undertaken" and to "supply the equipment, tools and
materials, which shall, by all means, be effective and efficient, at its own expense, necessary for the performance" of
janitorial services; Galit, who was employed by SJS, was assigned to petitioner's Pandacan depot as a janitor; his wages
and all employment benefits were paid by SJS; he was subject to the supervision, discipline and control of SJS; on
November 30, 2004, the extended contract between petitioner and SJS expired; subsequently, a new contract for janitorial
services was awarded by petitioner to another independent contractor; petitioner was surprised that Galit filed an action
impleading it; despite several conferences, the parties were not able to arrive at an amicable settlement.
Issue: Whether or not there existed an employer-employee relationship between petitioner and Galit, and whether or not
the former is liable to the latter for the termination of his employment.
Held: THERE IS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE COMPANY AND RESPONDENT

HEREIN, AND THE HONORABLE COURT OF APPEALS' AWARD OF REINSTATEMENT, BACKWAGES, AND
ATTORNEY'S FEES AGAINST THE COMPANY HAS NO LEGAL BASIS.
To ascertain the existence of an employer-employee relationship, jurisprudence has invariably adhered to the four-fold test,
to wit: (1) the selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the
power to control the employee's conduct, or the so-called "control test." Of these four, the last one is the most important.
The so-called "control test" is commonly regarded as the most crucial and determinative indicator of the presence or
absence of an employer-employee relationship. Under the control test, an employer-employee relationship exists where the
person for whom the services are performed reserves the right to control not only the end achieved, but also the manner
and means to be used in reaching that end.
In the instant case, the true nature of Galit's employment is evident from the Job Contract between petitioner and SJS. The
provisions of the Job Contract between petitioner and SJS demonstrate that the latter possessed the following earmarks of
an employer, to wit: (1) the power of selection and engagement of employees; (2) the payment of wages; (3) the power to
discipline and dismiss; and, (4) the power to control the employee's conduct.
As to SJS' power of selection and engagement, Galit himself admitted in his own affidavit that it was SJS which assigned
him to work at Chevron's Pandacan depot. As such, there is no question that it was SJS which selected and engaged Galit
as its employee.
With respect to the payment of wages, the Court finds no error in the findings of the LA that Galit admitted that it was SJS
which paid his wages. While Galit claims that petitioner was the one which actually paid his wages and that SJS was merely
used as a conduit, Galit failed to present evidence to this effect. Galit, likewise, failed to present sufficient proof to back up
his claim that it was petitioner, and not SJS, which actually paid his SSS, Philhealth and Pag-IBIG premiums. On the
contrary, it is unlikely that SJS would report Galit as its worker, pay his SSS, Philhealth and Pag-IBIG premiums, as well as
his wages, if it were not true that he was indeed its employee. In the same manner, the Quitclaim and Release, which was
undisputedly signed by Galit, acknowledging receipt of his separation pay from SJS, is an indirect admission or recognition
of the fact that the latter was indeed his employer. Again, it would be unlikely for SJS to pay Galit his separation pay if it is
not the latter's employer.
45. World’s Best Gas Inc. v Vital

Doctrine:
The Labor Arbiters shall have original and exclusive jurisdiction over claim for unpaid salaries and separation pay which
arose from an employer-employee relationship involving an amount exceeding 5k. The RTC lacks jurisdiction over claims
arising from employer-employee relationship.
46. Songco etal v NLRC

Doctrine:
Allowances and earned sales commissions should be included in the monthly salary for the purpose of computation for
separation pay. Article 97(f) by itself is explicit that commission is included in the definition of the term "wage".
47. Millares etal v NLRC

Doctrine:
Facilities, under the Rules Implementing the Labor Code mean articles or services for the benefit of the employee or his
family but excluding tools of the trade or articles or service primarily for the benefit of the employer or necessary to the
conduct of the employer's business.
When an employer customarily furnishes his employee board, lodging or other facilities, the fair and reasonable value
thereof, as determined by the Secretary of Labor and Employment, is included in wage. In this case, the allowances were
temporarily not regularly received by the employees. Therefore, the allowances do not form part of the salary base used in
computing the separation pay.
48. SLL International Cables specialist v NLRC

Doctrine:
The value of facilities can be deducted from the employees’ wages, the following requisites must all be attendant: first, proof
must be shown that such facilities are customarily furnished by the trade; second, the provision of deductible facilities must
be voluntarily accepted in writing by the employee; and finally, facilities must be charged at reasonable value. Mere
availment is not sufficient to allow deductions from employees’ wages.
49. Our Haus Realty Development Corporation v. Parian
Doctrine:
1. Facilities may be deducted from the employee’s wages but not the value of the supplements.
The benefit or privilege given to the employee which constitutes an extra remuneration above and over his basic or ordinary
earning or wage is supplement and when said benefit or privilege is part of the laborers’ basic wages and is necessary for
the laborer’s and his family’s existence and subsistence, it is a facility. The distinction lies not so much in the kind of benefit
or item such as food, lodging, bonus or sick leave given, but in the purpose for which it is given. In the case at bench, the
items provided were given freely for the purpose of maintaining the efficiency and health of its workers while they were
working at their respective projects.
Ultimately, the real difference lies not on the kind of the benefit but on the purpose why it was given by the employer. If it is
primarily for the employee’s gain, then the benefit is a facility; if its provision is mainly for the employer’s advantage, then it
is a supplement. Again, this is to ensure that employees are protected in circumstances where the employer designates a
benefit as deductible from the wages even though it clearly works to the employer’s greater convenience or advantage.
Under the purpose test, substantial consideration must be given to the nature of the employer’s business in relation to the
character or type of work performed by the employees involved This test is used to address inequitable situations wherein
employers consider a benefit deductible from the wages even if the factual circumstances show that it clearly redounds to
the employer’s greater advantage.
Facilities may be deducted from the employee’s wages but not the value of the supplements. Facilities include articles or
services primarily for the benefit of the employers or necessary to the conduct of the employer’s business.
2. There is no distinction between deduction and charging. Both, deduction and charging, operate lessen the actual
take-home pay of an employee; they are two sides of the same coin. In both, the employee receives a lessened amount
because supposedly, the facility’s value, which is part of his wage, had already been paid to him in kind. As there is no
substantial distinction between the two, the requirements set by law must apply to both. Hence, the following
requirements in Mabeza must be applied:
a. Proof must be shown that such facilities are customarily furnished by the trade;
Note:
 Facility must be customarily furnished by the trade – one of the badges to show such is the existence of a company
policy or guideline showing the provisions for a facility were designated as part of the employee’s salaries. Also ,
the employer may also prove compliance by showing the existence of an industry-wide practice of furnishing the
benefits among enterprises engaged in the same line of business.
 And even if a benefit is customarily provided by the trade, it must still pass the purpose test set by jurisprudence.
b. The provisions of deductible facilities must be voluntarily accepted in writing by the employee; and
c. The facilities must be charged at fair and reasonable value.
50. American wire and cable daily rated employees union v American wire
Doctrine:
A bonus is not demandable and enforceable obligation, except when it is made part of the wage, salary or
compensation of the employee. Bonus is an amount granted and paid to an employee for his industry and loyalty which
contributed to the success of the employer’s business and made possible the realization of profits. The granting of a bonus
is a management prerogative, something given in addition to what is ordinary received by or strictly due the recipient.
For a bonus to be enforceable:
1. It must have been promised by the employer;
2. Expressly agreed upon by parties or it must have had fixed amount; and
3. Had been a long and regular practice on the part of the employer
Thus, the benefits and entitlements mentioned in the instant case are all considered bonuses which were given by the
private respondent out of its generosity and munificence. The assailed benefits were never subjects of any agreement
between the union and the company. It was never incorporated in the CBA. To be considered a “regular practice”, the giving
of the bonus should have been done over a long period of time, and must be shown to have been consistent and deliberate.
The downtrend in the grant of these two bonuses over the years demonstrates that there is nothing consistent about it. To
hold that an employer should be forced to distribute bonuses which it granted out of kindness is to penalize him for his past
generosity.
51. TSPIC Corporation v. TSPIC Employees Union
Doctrine: Collective Bargaining Agreement is the law between the employers and their employees; CBA entered
into by unions and their employers are binding upon the parties and be acted in strict compliance therewith.
Thus, the Supreme Court ruled in the affirmative as to whether the overpayment constitutes diminution of pay as alleged by
the Union implemented by TSPIC as mandated in the by the CBA simultaneous with the increasing of the minimum wage
for workers in the National Capital Region. The CBA should be followed thus, the senior employees who were first promoted
as regular employees shall be entitled for the increase in their salaries and the same with the lower rank workers.
52. Lepanto Ceramics v Lepanto Ceramics Employees Union
Doctrine: The rule is settled that any benefit and supplement being enjoyed by the employees cannot be reduced,
diminished, discontinued or eliminated by the employer. The principle of non-diminution of benefits is founded on
the constitutional mandate to protect the rights of workers to promote their welfare and to afford labor full
protection. Hence, absent any proof that petitioners consent was vitiated by fraud, mistake or duress, it is
presumed that it entered into the CBA voluntarily and had full knowledge of the contents thereof and was aware of
its commitments under the contract.
By definition, a bonus is a gratuity or act of liberality of the giver. It is something given in addition to what is ordinarily
received by or strictly due the recipient. A bonus is granted in paid to an employee for his industry and loyalty which
contributed to the success of the employer’s business and made possible the realization profits. A bonus is also granted by
an enlightened employer to spur the employee to greater efforts for the success of the business and realization of bigger
profits. Generally, a bonus is not a demandable and enforceable obligation. For a bonus to be enforceable it must have
been promised by the employer and expressly agreed upon the parties. But if the bonus is integrated in the collective
bargaining agreement, the same part takes the nature of the demandable obligation. Verily, by virtue of its incorporation in
the CDA, a Christmas bonus due has become more than just act of generosity on the part petitioner but a contractual
obligation it has under taken.
Collective Bargaining Agreement refers to a negotiated contract between a legitimate labor organization and the employer,
concerning wages, hours of work, and all other terms and conditions of employment in a bargaining of unit. As in all other
contracts, the parties to CBA may established such stipulations, clauses, terms and conditions and they may deem
convenient, provided these are not contrary to law, morals good customs, public order or public policy. It is familiar and
fundamental doctrine in labor that the CBA is the law between the parties and they are obliged to comply with its provision.
These principle stands and through in the case at bar. A reading of the provision of the CBA reveals the same provides for
the giving of a Christmas gift package / bonus without qualification. Terse and clear, the said provision did not state that the
Christmas package shall be made to depend on the petitioner’s financial standing. The records are also brief of any showing
that the petitioner made it during CBA negotiation that the bonus was dependent on any condition. Indeed, if the petitioner
and respondent association intended that the P3,000.00 bonus would dependent on the company’s earnings , such
intention should have been expressed In the CBA.
Business losses are a feeble ground for petitioner to repudiate its obligation under the CBA. The rule is settled that any
benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by the
employer. The principle of non-diminution of benefits is founded on the constitutional mandate to protect the rights of
workers to promote their welfare and to afford labor full protection. Hence, absent any proof that petitioners consent was
vitiated by fraud, mistake or duress, it is presumed that it entered into the CBA voluntarily and had full knowledge of the
contents thereof and was aware of its commitments under the contract.
53. Eastern Telecom vs Eastern Telecom Employees Union
IF : it is additional compensation + promised by employer + unconditional = part of wage

IF : conditional, i.e. paid only if profits are realized or certain level of productivity is achieved = not part of wage
IF : not payable to all but only to some employees and only when they are efficient or more productive = only an
inducement; not part of wage.
Any benefit and supplement being enjoyed by the employees cannot be reduced, diminished, discontinued or eliminated by
the employer.
54. GSIS vs NLRC
> Principal-Employer (indirect employer) is solidary liable with contractor (actual employer) if the latter fails to pay
employees
> Allowing services to continue despite expiration of service contract is an implied continuation of employment
55. Aliviado vs Proctor and Gambles Phils. Inc
> Labor-only contracting is prohibited. There is labor-only contracting where the contractor/subcontractor
 LC A106 : does not have substantial capital ; person / intermediary deemed to be an agent of the principal/employer
with the latter responsible for the workers as if they were directly employed by him
 LC IRR contractor merely recruits, supplies or places workers with any of the following elements
o Contractor/subcontractor does not have substantial capital or investment . . . and the employees recruited,
supplied or placed are performing activities which are directly related to the main business of the principal ;
OR
o Contractor does not exercise the right to control over the performance of the work of the contractual
employee
56. Mandaue Galleon Trade vs Andales
> labor-only contracting is prohibited under the last paragraph A106 ; if contractor is a labor-only contractor, there is an
employer-employee relationship between the principal (indirect employer) and the employees, making the contractor merely
an agent of the principal
57. SPIC N’ SPAN VS PAJE

Art. 106 - legitimate/permissible job contracting or as prohibited labor-only contracting
In order that a labor relationship can be categorized as legitimate/permissible job contracting or as prohibited labor-only
contracting, the totality of the facts and the surrounding circumstances of the relationship ought to be considered.
In permissible job contracting, the principal agrees to put out or farm out with a contractor or subcontractor the performance
or completion of a specific job, work or service within a definite or predetermined period, regardless of whether such job,
work or service is to be performed or completed within or outside the premises of the principal. The test is whether the
independent contractor has contracted to do the work according to his own methods and without being subject to the
principal’s control except only as to the results, he has substantial capital, and he has assured the contractual employees
entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security
of tenure, and social and welfare benefits.
58. VIGILLA ET. AL. V PCCI
Art. 106 – A Labor-only Contractor is Solidarily Liable with the Employer
In legitimate job contracting, the law creates an employer-employee relationship for a limited purpose, i.e., to ensure that the
employees are paid their wages. Theprincipal employer becomes jointly and severally liable with the job contractor only for
the payment of the employees' wages whenever the contractor fails to pay the same. Other than that, the principal employer
is not responsible for any claim made by the employees.On the other hand, in labor-only contracting, the statute creates an
employer-employee relationship for a comprehensive purpose: to prevent a circumvention of labor laws. The contractor is
considered merely an agent of the principal employer and the latter is responsible to the employees of the labor-only
contractor as if such employees had been directly employed by the principal employer. The principal employer therefore
becomes solidarily liable with the labor-only contractor for all the rightful claims of the employees.
59. EMMANUEL BABAS ET. AL. V LORENZO SHIPPING CORPORATION
Art. 106 –
Labor-only contracting, a prohibited act, is an arrangement where the contractor or subcontractor merely recruits, supplies,
or places workers to perform a job, work, or service for a principal. In labor-only contracting, the following elements are
present: (a) the contractor or subcontractor does not have substantial capital or investment to actually perform the job, work,
or service under its own account and responsibility; and (b) the employees recruited, supplied, or placed by such contractor
or subcontractor perform activities which are directly related to the main business of the principal.
On the other hand, permissible job contracting or subcontracting refers to an arrangement whereby a principal agrees to put
out or farm out with the contractor or subcontractor the performance or completion of a specific job, work, or service within a
definite or predetermined period, regardless of whether such job, work, or service is to be performed or completed within or
outside the premises of the principal.
A person is considered engaged in legitimate job contracting or subcontracting if the following conditions concur:
(a) The contractor carries on a distinct and independent business and undertakes the contract work on his account under
his own responsibility according to his own manner and method, free from the control and direction of his employer or
principal in all matters connected with the performance of his work except as to the results thereof;
(b) The contractor has substantial capital or investment; and
(c) The agreement between the principal and the contractor or subcontractor assures the contractual employees'
entitlement to all labor and occupational safety and health standards, free exercise of the right to self-organization, security
of tenure, and social welfare benefits.
60. FIRST PHILIPPINE INDUSTRIAL CORP. V. CALIMBAS & MALIHOM
Art. 106
It is axiomatic that the test to determine the existence of independent contractorship is whether one claiming to be an
independent contractor has contracted to do the work according to his own methods and without being subjected to the
control of the employer, except only to the results of the work.
61. Alilin et al vs Petron
A contractor is presumed to be a labor-only contractor, unless it proves that it has the substantial capital, investment, tools
and the like. However, where the principal is the one claiming that the contractor is a legitimate contractor, the burden of
proving the supposed status of the contractor rests on the principal
62. Fonterra Brands Phils s Lagardo
Fixed-term employment contracts are not limited, as they are under the present Labor Code, to those by nature seasonal or
for specific projects with predetermined dates of completion; they also include those to which the parties by free choice have
assigned a specific date of termination.11 The determining factor of such contracts is not the duty of the employee but the
day certain agreed upon by the parties for the commencement and termination of the employment relationship.
63. Cusap vs Adidas Phil Inc
One of the criteria in determining whether a contractor is a legitimate job contractor is its possession of substantial capital to
finance its undertakings. Substantial capital or investments refers to capital stocks and subscribed capitalization in the case
of corporations, tools, equipments, implements, machineries and work premises, actually and directly used by the contractor
or subcontractor in the performance or completion of the job, work, or service contracted out.
64. Petron Corp vs Caberte

A contractor is presumed by law to be a labor only contractor, anyone claiming the supposed status of an independent
contractor bears the burden of proving the same.
To determine whether a contractor is engaged in labor only contracting or permissible job contracting, the totality of the facts
and the surrounding circumstances of the case are to be considered.
65. DBP v NLRC
Art. 110 should not be treated apart from other laws but applied in conjunction with the pertinent provisions of the Civil Code and the
Insolvency Law to the extent that piece-meal distribution of the assets of the debtor is avoided.
66. SHS PERFORATED MATERIALS INC V DIAZ
Any withholding of an employees wages by an employer may only be allowed in the form of wage deductions under the circumstances
provided in Article 113 of the Labor Code, as set forth below:
ART. 113. Wage Deduction. No employer, in his own behalf or in behalf of any person, shall make any deduction from the wages of his
employees, except:
(a) In cases where the worker is insured with his consent by the employer, and the deduction is to recompense the employer for the
amount paid by him as premium on the insurance;
(b) For union dues, in cases where the right of the worker or his union to check-off has been recognized by the employer or authorized
in writing by the individual worker concerned; and
(c) In cases where the employer is authorized by law or regulations issued by the Secretary of Labor.
As correctly pointed out by the LA, absent a showing that the withholding of complainants wages falls under the exceptions provided in
Article 113, the withholding thereof is thus unlawful.
67. PI MANUFACTURING INC V MANUFACTURING SUPERVISORS and FORMAN ASSOCIATION
The 1987 CBA increased the monthly salaries of the supervisors by P625.00 and the foremen, by P475.00, effective May 12, 1987.
These increases re-established and broadened the gap, not only between the supervisors and the foremen, but also between them and
the rank-and-file employees. Significantly, the 1987 CBA wage increases almost doubled that of the P10.00 increase under R.A. No.
6640. The P625.00/month means P24.03 increase per day for the supervisors, while the P475.00/month means P18.26 increase per
day for the foremen. These increases were to be observed every year, starting May 12, 1987 until July 26, 1989. Clearly, the gap
between the wage rates of the supervisors and those of the foremen was inevitably re- established. It continued to broaden through the
years. Interestingly, such gap as re-established by virtue of the CBA is more than a substantial compliance with R.A. No. 6640.
In fine, it must be emphasized that in the resolution of labor cases, this Court has always been guided by the State policy enshrined in
the Constitution that the rights of workers and the promotion of their welfare shall be protected. However, consistent with such policy,
the Court cannot favor one party, be it labor or management, in arriving at a just solution to a controversy if the party concerned has no
valid support to its claim, like respondents here.
68. BANKARD EMPLOYEES UNION WORKERS ALLIANCE TRADE UNIONS V NLRC

The fixing of hiring rates which resulted to wage increases was a voluntary and unilateral increase made by Bankard. The Court held
that Article 124 is to be construed in relation to minimum wage fixing, the intention of the law being that in case of an increase in
minimum wage, the distinctions in the wage structure will be preserved.
Wage distortion: There are four elements of wage distortion, namely: (1) An existing hierarchy of positions with corresponding salary
rates, (2) a significant change in the salary rate of a lower pay class without a concomitant increase in the salary rate of a higher one,
(3) the elimination of the distinction between the two levels and (4) the existence of the distortion in the same region of the country.
In a problem dealing with "wage distortion," the basic assumption is that there exists a grouping or classification of employees that
establishes distinctions among them on some relevant or legitimate bases. Various factors such as the degrees of responsibility, the
skills and knowledge required, the complexity of the job, or other logical basis of differentiation are involved in such classifications.
69. Central Azucarera de Tarlac v Central Azucarera de Tarlac Union
"Thirteenth-month pay" shall mean one twelfth (1/12) of the basic salary of an employee within a calendar year; the term
"basic salary" of an employee for the purpose of computing the 13th-month pay was interpreted to include all remuneration
or earnings paid by the employer for services rendered, but does not include allowances and monetary benefits which are
not integrated as part of the regular or basic salary, such as the cash equivalent of unused vacation and sick leave credits,
overtime, premium, night differential and holiday pay, and cost-of-living allowances. However, these salary-related benefits
should be included as part of the basic salary in the computation of the 13th-month pay if, by individual or collective
agreement, company practice or policy, the same are treated as part of the basic salary of the employees.
70. People’s Broadcasting Service v Sec. of Labor
No procedure was laid down where the DOLE would only make a preliminary finding, that the power was primarily held by
the NLRC. The law did not say that the DOLE would first seek the NLRC’s determination of the existence of an employer-
employee relationship, or that should the existence of the employer- employee relationship be disputed, the DOLE would
refer the matter to the NLRC.
The DOLE, in determining the existence of an employer-employee relationship, has a ready set of guidelines to follow, the
same guide the courts themselves use. The elements to determine the existence of an employment relationship are: (1) the
selection and engagement of the employee; (2) the payment of wages; (3) the power of dismissal; (4) the employer’s power
to control the employee’s conduct.9 The use of this test is not solely limited to the NLRC.
Under Art. 128(b) of the Labor Code, as amended by RA 7730, the DOLE is fully empowered to make a determination as to
the existence of an employer-employee relationship in the exercise of its visitorial and enforcement power, subject to judicial
review, not review by the NLRC. WHEREFORE, the Decision of this Court in G.R. No. 179652 is hereby AFFIRMED, with
the MODIFICATION that in the exercise of the DOLE’s visitorial and enforcement power, the Labor Secretary or the latter’s
authorized representative shall have the power to determine the existence of an employer- employee relationship, to the
exclusion of the NLRC.
71. Yanson v Secretary of Labor

Section 9. Cash or surety bond; when required. - In case the order involves a monetary award, an appeal by the employer
may be perfected only upon the posting of a cash or surety bond issued by a duly accredited bonding company. The bond
should be in the amount equivalent to the monetary award indicated in the order.
Under the foregoing Implementing Rules, it is plain that public respondent has no authority to accept an appeal under a
reduced bond.
72. Balladares v Peak Ventures
Yes, the Regional Director correctly assume jurisdiction over the case. The complaint involved underpayment of wages. In
order to verify the allegations in the complaint, DOLE conducted an inspection which yielded proof of violations of labor
standards. By nature of the complaint and from the result of the inspection the authority of the DOLE under Art. 128 of Labor
Code came into play regardless of monetary value of claims involved. The Secretary of Labor or his duly authorized
representatives is now empowered to hear and decide in summary proceeding, any matter involving the recovery of amount
of wages and other monetary claims arising out of employer-employee relationship at the time of inspections, even if the
amount of money claims exceed PHP5000.
The Regional Director correctly assumed jurisdiction over the money claims of petitioners even if the claims exceeded
PHP5,000. Said jurisdiction was in accordance with Art. 128(b) of the Labor Code and the case does not fall under the
exception clause. We must take note that the doctrine in the Servando case is no longer controlling upon the amendment of
Art. 128 by RA 7730, Secretary of Labor or his duly authorized representative is now empowered to hear and decide money
claims arising out of employeremployee relationship at the time of inspection. In this case, Peak Ventures did not contest
the findings of Regional Director, it even admitted before the Court of Appeals that petitioners were not paid correct wages
and as a defense tried to pass the buck to Yangco Market, therefore the case does not fall under the exceptions provided in
Art. 128 (b) of the Labor Code which would have divested Regional Director of jurisdiction over the case.
73. ALLIED INVESTIGATION BUREAU, INC. v. HON. SECRETARY OF LABOR & EMPLOYMENT
While it is true that under Articles 129 and 217 of the Labor Code, the Labor Arbiter has jurisdiction to hear and decide
cases where the aggregate money claims of each employee exceeds P5,000.00, said provisions of law do not contemplate
nor cover the visitorial and enforcement powers of the Secretary of Labor or his duly authorized representatives.
ART. 128 (B) Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary, and in cases
where the relationship of employer-employee exists, the Secretary of Labor and Employment or his duly authorized
representatives shall have the power to issue compliance orders to give effect to the labor standards provisions of this Code
and other labor legislation based on the findings of labor employment and enforcement officers or industrial safety
engineers made in the course of inspection. The Secretary or his duly authorized representatives shall issue writs of
execution to the appropriate authority for the enforcement of their orders, except in cases where the employer contests the
findings of the labor employment and enforcement officer and raises issues supported by documentary proofs which were
not considered in the course of inspection.
An order issued by the duly authorized representatives of the Secretary of Labor and Employment under this article may be
appealed to the latter. In case said order involves a monetary award, an appeal by the employer may be perfected only
upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Secretary of Labor
and Employment in the amount equivalent to the monetary award in the order appealed from.
The aforequoted provision explicitly excludes from its coverage Articles 129 and 217 of the Labor Code by the phrase
Notwithstanding the provisions of Articles 129 and 217 of this Code to the contrary thereby retaining and further
strengthening the power of the Secretary of Labor or his duly authorized representatives to issue compliance orders to give
effect to the labor standards provisions of said Code and other labor legislation based on the findings of labor employment
and enforcement officers or industrial safety engineers made in the course of inspection.
74. URBANES, JR. v. SECRETARY OF LABOR AND EMPLOYMENT
It is well settled in law and jurisprudence that where no employer-employee relationship exists between the parties and no
issue is involved which may be resolved by reference to the Labor Code, other labor statutes or any collective bargaining
agreement, it is the Regional Trial Court that has jurisdiction. In its complaint, private respondent is not seeking any relief
under the Labor Code but seeks payment of a sum of money and damages on account of petitioner's alleged breach of its
obligation under their Guard Service Contract. The action is within the realm of civil law hence jurisdiction over the case
belongs to the regular courts. While the resolution of the issue involves the application of labor laws, reference to the labor
code was only for the determination of the solidary liability of the petitioner to the respondent where no employer-employee
relation exists.
ART. 106. CONTRACTOR OR SUBCONTRACTOR. Whenever an employer enters into contract with another
person for the performance of the formers work, the employees of the contractor and of the latter’s subcontractor, if any,
shall be paid in accordance with the provisions of this Code.
In the event that the contractor or subcontractor fails to pay the wage of his employees in accordance with this
Code, the employer shall be jointly and severally liable with his contractor or subcontractor to such employees to the extent
of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed
by him.
It is clear also from the foregoing that it is only when [the] contractor pays the increases mandated that it can claim
an adjustment from the principal to cover the increases payable to the security guards.
75. ZIALCITA, ET. AL. v. PHILIPPINE AIRLINES
When Presidential Decree No. 148, otherwise known as the Women and Child Labor Law, was promulgated in 13 March
1973, PAL’s policy had met its doom. However, since no one challenged its validity, the said policy was able to obtain a
momentary reprieve.
Section 8 of PD148 is exactly the same provision reproduced verbatim in Article 136 of the Labor Code, which was
promulgated on 1 May 1974 and took effect six months later. Although Article 132 enjoins the Secretary of Labor to
establish standards that will ensure the safety and health of women employees and in appropriate cases shall by regulation
require employers to determine appropriate minimum standards for termination in special occupations, such as those of
flight attendants, it is logical to presume that, in the absence of said standards or regulations which are yet to be
established, the policy of PAL against marriage is patently illegal.
Article 136 is not intended to apply only to women employed in ordinary occupations, or it should have categorically
expressed so. The sweeping intendment of the law, be it on special or ordinary occupations, is reflected inthe whole text
and supported by Article 135 that speaks of non-discrimination on the employment of women.
76. STAR PAPER CORPORATION v. SIMBOL
Company Policy: In case of two of our employees (both singles, one male and another female) developed a friendly
relationship during the course of their employment and then decided to get married, one of them should resign to preserve
the policy.
Art. 136. It shall be unlawful for an employer to require as a condition of employment or continuation of employment
that a woman employee shall not get married, or to stipulate expressly or tacitly that upon getting married a woman
employee shall be deemed resigned or separated, or to actually dismiss, discharge, discriminate or otherwise prejudice a
woman employee merely by reason of her marriage.
Respondents submit that their dismissal violates the above provision. Petitioners allege that its policy may appear
to be contrary to Article 136 of the Labor Code but it assumes a new meaning if read together with the first paragraph of the
rule. The rule does not require the woman employee to resign. The employee spouses have the right to choose who
between them should resign. Further, they are free to marry persons other than co-employees. Hence, it is not the marital
status of the employee, per se, that is being discriminated. It is only intended to carry out its no-employment-for-relatives-
within-the-third-degree-policy which is within the ambit of the prerogatives of management.
It is true that the policy of petitioners prohibiting close relatives from working in the same company takes the nature of an
anti-nepotism employment policy. Companies adopt these policies to prevent the hiring of unqualified persons based on
their status as a relative, rather than upon their ability. These policies focus upon the potential employment problems arising
from the perception of favoritism exhibited towards relatives.
They reason that the no-spouse employment policy violate the marital status provision because it arbitrarily discriminates
against all spouses of present employees without regard to the actual effect on the individual's qualifications or work
performance. These courts also find the no-spouse employment policy invalid for failure of the employer to present any
evidence of business necessity other than the general perception that spouses in the same workplace might adversely
affect the business. They hold that the absence of such a bona fide occupational qualification invalidates a rule denying
employment to one spouse due to the current employment of the other spouse in the same office. Thus, they rule that
unless the employer can prove that the reasonable demands of the business require a distinction based on marital status
and there is no better available or acceptable policy which would better accomplish the business purpose, an employer may
not discriminate against an employee based on the identity of the employee’s spouse. This is known as the bona fide
occupational qualification exception.
To justify a bona fide occupational qualification, the employer must prove two factors: (1) that the
employment qualification is reasonably related to the essential operation of the job involved; and, (2) that there is a factual
basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the
duties of the job.
Petitioners contend that their policy will apply only when one employee marries a co-employee, but they are free to
marry persons other than co-employees. The questioned policy may not facially violate Article 136 of the Labor Code but it
creates a disproportionate effect and under the disparate impact theory, the only way it could pass judicial scrutiny is a
showing that it is reasonable despite the discriminatory, albeit disproportionate, effect. The failure of petitioners to prove a
legitimate business concern in imposing the questioned policy cannot prejudice the employee’s right to be free from
arbitrary discrimination based upon stereotypes of married persons working together in one company.
77. Domingo v Rayala

It is true that the provision calls for a “demand, request or requirement of a sexual favor.” But it is not necessary that the
demand, request or requirement of a sexual favor be articulated in a categorical oral or written statement. It may be
discerned, with equal certitude, from the acts of the offender. Holding and squeezing Domingo’s shoulders, running his
fingers across her neck and tickling her ear, having inappropriate conversations with her, giving her money allegedly for
school expenses with a promise of future privileges, and making statements with unmistakable sexual overtones- all these
acts of Rayala resound with deafening clarity the unspoken request for a sexual favor.
It is enough that the respondent’s acts result in creating an intimidating, hostile or offensive environment for the employee.
78. Phil. Aeolus Automotive United Corp. v NLRC
The gravamen of the offense in sexual harassment is not the violation of the employee’s sexuality but the abuse of power
by the employer. An employee, male or female, may rightfully cry “foul” provided the claim is well substantiated. Strictly
speaking, there is no time period within which he or she is expected to complain through the proper channels. The time to
do so may vary depending upon the needs, circumstances, and more importantly, the emotional threshold of the employee.
Sexual harassment is an imposition of misplaced “superiority” which is enough to dampen an employee’s spirit in her
capacity for advancement. It affects her sense of judgment; it changes her life.
79. Apex Mining Company v NLRC
The term “househelper’ cannot be interpreted to include househelp or laundrywomen working in staffhouses of a company,
like petitioner who attends to the needs of the company’s guest and other persons availing of said facilities. By the same
token, it cannot be considered to extend to then driver, houseboy or gardener exclusively working in the company,
staffhouses, and its premises.
The criteria is personal comfort and enjoyment of the family of the employer in the home of said employer.
In the instant case, they are employees of the company or employer in the business concerned entitled to the privileges of a
regular employee.

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LABOR STANDARDS under Atty.

COMPILED SET OF CASE DOCTRINES

3. YAP v THENAMARIS SHIP’S MANAGEMENT

5. TRANS ACTION OVERSEAS CORP. v DOLE SECRETARY

Concurrent Jurisdiction of DOLE Secretary and POEA to Suspend or Cancel a License

6. REPUBLIC v. PRINCIPALIA MANAGEMENT AND PERSONNEL CONSULTATIONS

7. DATUMAN vs FIRST COSMOPOLITAN MANPOWER

8. STOLT-NIELSEN TRANSPORTATION v MEDEQUILLO

Section 10 of Republic Act No. 8042 (Migrant Workers Act) provides:

9. PEOPLE v DELA PIEDRA

10. ESTATE OD NELSON DULAY v ABOITIZ

11. SANTIAGO v CF SHARP CREW MANAGEMENT

12. HON. STO TOMAS v SALAC

13. SAMEER OVERSEAS v JOY C CABILES

(b) Gross and habitual neglect by the employee of his duties;

(e) Other causes analogous to the foregoing.

14. MAERSK-FILIPINAS v AVESTRUZ

As explained in Skippers Pacific, Inc. v. Mira;

15. SUNACE INTERNATIONAL v NLRC, DIVINA MONTEHERMOZO

16. SAUDI ARABIAN AIRLINES v REBESENCIO

17. Republic of the Philippines v Principalia Management and Personnel Consultants

18. Century Canning Corp. vs Court of Appeals

19. Bernardo, et. al. vs. NLRC

20. Francisco vs NLRC

21. SONZA VS ABS CBN

22. JAVIER VS FLYACE CORP

23. SMCEU VS JUDGE BERSAMIRA

24. LOCSIN ET. AL VS PLDT

25. People's Broadcasting Service v. Secretary of Labor, March 6, 2012

26. Ymbong v. ABS-CBN, March 7, 2012

27. Professional Services v. Court of Appeals, February 11, 2008

29. TENEZAS ET.AL. VS VILLEGAS TAXI TRANSPORT

30. TONGKO VS MANUFACTURER'S LIFE INSURANCE

31. TAPE INC VS SERVANA

32. ENCYCLOPEDIA BRITANNICA VS NLRC

33. Atok Big Wedge Co. Inc. v. Gison

Case Doctrine: Employee-Employer Relationship – Control Test

1. The selection and engagement of the employee

Issue: whether the Dumpit-Murillo is a regular employee or a fixed-term employee.

35. Bernarte v. PBA

Case Doctrine: Employee-Employer Relationship – Control Test

Issue: Was there an employee-employer relationship in this case?

36. Jardin v. NLRC

Issue: Was there EE relationship? Were the drivers dismissed illegally?

37. Chavez v. NLRC

38. Gabriel v. Bilon

39. Coca-Cola Bottlers (Phils.) v. Climaco

40. Felix v. Buenaseda

41. AUTOBUS TRANSPORT SYSTEM vs. BAUTISTA (2005) G.R. 156364

Issue: WON respondent is entitled to service incentive leave.

Held: The respondent is entitled to service incentive leave.

While the complaint was pending, ABS-CBN terminated their employment.

Issue: Whether or not petitioners and ABS-CBN had an employer-employee relationship

Held: Petitioners are regular employees of ABS-CBN.

44. CHEVRON PHILS., INC. vs. GALIT

Held: THERE IS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE COMPANY AND RESPONDENT

45. World’s Best Gas Inc. v Vital

46. Songco etal v NLRC

47. Millares etal v NLRC

48. SLL International Cables specialist v NLRC

49. Our Haus Realty Development Corporation v. Parian

51. TSPIC Corporation v. TSPIC Employees Union

52. Lepanto Ceramics v Lepanto Ceramics Employees Union